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MSME loan schemes

The MSME (Micro, Small, and Medium Enterprise) ecosystem in India is thriving with innovative ideas and exceptional participation. However, the presence of women entrepreneurs in the MSME sector is quite low as compared to that of male entrepreneurs.

According to the data published by Startup India regarding what is MSME and the related details, only 13.76% of the total entrepreneurs in the country happen to be women. While the count of male entrepreneurs is over 50 Million, the number of women entrepreneurs is a mere 8 Million.

Both central and state governments have initiated schemes to promote and back entrepreneurship among women.

Under the PMEGP (Prime Minister’s Employment Generation Programme) Scheme, around 1.38 Lakh projects have been planned by women entrepreneurs. This holds about 30% of the total projects included under the PMEGP scheme.

Business loans for women, MSME loan schemes, and other initiatives have been facilitated to support women entrepreneurs in urban as well as rural areas.

Schemes launched by the government to support women entrepreneurs

As per the survey conducted by the MasterCard Index of Women Entrepreneurs, India ranks 49th among 54 countries in terms of women-owned business. Females, who are the breadwinner of a family, look for various business ideas and ways to arrange funds to get it started.

Bringing in gender equality in the society is not just a goal, but the need of the hour. The government has thus decided to step into the matter and encourage women who wish to set up a business of their own.

Given below are a number of schemes launched by the government addressing women entrepreneurs in India

1. Mudra Yojana Scheme

MUDRA (Micro Units Development and Refinance Agency), launched on 8th April 2015, is a public sector financial institution, which provides loan at low-interest rates to encourage women to set up their own business venture.
After proper verification of the applicant, the individual receives a MUDRA card, which can be used to purchase raw materials for the business.

The scheme is categorized into 3 parts

  • Shishu – The maximum loan amount in this category is limited to Rs.50,000.
  • Kishore – Business loans ranging from Rs.50,000 to Rs.5 lakh to established enterprises.
  • Tarun – Loans up to Rs.10 lakh for successful companies looking to expand their business.

2. Annapurna Scheme

Women who have started their own food catering services can avail a loan amount up to Rs.50,000. This scheme was launched on 1st April 2000.

3. Mahila Udhyam Nidhi Scheme

Under this scheme, the SIDBI provides loan for women entrepreneurs to help them upgrade and expand their business. Eligible candidates can avail a loan of up to Rs.10 lakh to set up small-scale ventures.

4. Rashtriya Mahila Kosh

This is a national-level organization that was set up under the Ministry of Women and Child Development. RMK extends credit to women entrepreneurs belonging to the informal sector. These funds are offered without collateral. The maximum amount which can be withdrawn through the organization is Rs.50,000.

Women entrepreneurs can also apply for loans from reputed financial companies and utilize the sum to set up, expand, or upgrade the business. Bajaj Finserv is an NBFC that provides Business Loans specifically for women.

The company also brings unique and exclusive pre-approved offers that benefit the customers by rendering process of loan availing simple and hassle-free.

Compared to the above schemes, loans withdrawn for business purposes, such as MSME loan schemes, do not require collateral from the borrower. This makes it one of the most convenient sources of financing business for women.

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